Gross mortgage lending has reached a new record of £34.2bn in June, up from £31.4bn in May, according to the Council of Mortgage Lenders (CML).

CML blames seasonal effects and borrowers’ response to higher interest rates for this. Although lending in June was up by 9% on May, this was a lower monthly increase for June than in each of the last two years (12% in 2006 and 15% in 2005).

CML also believes that strong levels of lending will continue reflecting the growth in mortgage approvals over recent months and more borrowers exiting short term fixed-rate deals. CML’s expectations include a higher percentage of occupiers re-mortgaging to minimise potential payment shock and lower numbers of house purchases as fewer people chose to move.
Michael Coogan, CML director general, said: “ While the markets still expect one more interest rate rise before the end of the year, we believe the Monetary Policy Committee should carefully assess the impact of past rises on inflationary pressures before it takes further action. In the meantime, borrowers should be thinking seriously about how they will afford higher mortgage payments if they come out of a fixed-rate deal this year.”